Instacart shoppers complain of pay cuts as company shifts to new model

After pulling 12-hour shifts as a restaurant hostess, Alid Alvarado was eager for a job that would allow her to spend more time with her three young kids. She found it as a shopper with Instacart, the on-demand grocery delivery service, which allowed her to set her own schedule and earn some $300 a week for 20 hours of work.

But two weeks after she became a shopper — a job that entails getting customers’ groceries from store shelves to their homes — Instacart changed its payment structure and, Alvarado said, her earnings plunged.

Those 20 hours yielded less than $160 as she waited for higher-paying orders to come through. “We’re being mistreated,” said Alvarado, 28, a single mom who lives in Oak Lawn, Ill., a south suburb of Chicago.

Instacart, which boasts a community of 70,000 shoppers across the U.S. and Canada, has attracted $1.6 billion in funding since its founding in 2012 as investors anticipate a surge in consumers ordering their groceries online. Its CEO recently said an initial public offering is on the horizon.

But the San Francisco-based company for years has angered some shoppers who say numerous tweaks to the payment model have resulted in pay cuts, prompting them to boycott and attempt to organize the loose network of independent contractors.

The latest uproar came after Instacart announced in October that by the end of the year all shoppers will be paid according to a new formula intended to improve transparency. That formula takes into account factors like the weight of items purchased. But workers say the result has been inconsistent earnings and an increase in orders that pay too little to be worth their time.

Since the new system rolled out in the Chicago market Nov. 5, some local shoppers have been boycotting low-paying orders, in hopes that if enough workers decline to take them the company will be forced to pay more.

“The gig companies need to be held accountable to the people who built their businesses,” said Matthew Telles, a shopper in Des Plaines and a chief agitator in the fight for better pay from Instacart. Telles, one of 10 organizers leading the boycotts and letter campaigns nationally, estimates that anywhere from 1,000 to 15,000 shoppers are actively participating in the boycott — he has no way of measuring for sure.

Instacart says its operations have not been affected by the boycott, which is taking place in markets across the U.S., including “no meaningful impact on delayed customer orders.”

The new features, intended to make shoppers’ jobs easier, were formulated in consultation with shoppers, the company said. Shoppers’ average hourly earnings have remained consistent as the changes roll out in more markets.

Telles doesn’t buy that and accuses the fast-growing company of investing less in its workers than in algorithms that he thinks calculate the lowest payment shoppers might be willing to take.

The labor strife that has accompanied the rise of online gig platforms has prompted some scholars to advocate for a new category of “independent worker” that would get some protections currently reserved for traditional employees, such as the right to unionize and collectively bargain, though such proposals have not moved forward formally.

The state's technology system has been plagued by high-profile failures, and finding someone willing to head the department has proven challenging. "It keeps me up at night," Walz said in an interview.